
By incorporating Environmental, Social, and Governance (ESG) concepts as part of the financial strategy, it has changed the way businesspeople and investors make decisions based on the factors of profitability and sustainability. Based on a select group of studies that formed the evidence base, this article explores how ESG factors can benefit the financial performance by decreasing risk and materialising stakeholder expectations. It discusses strategic decision-making, shareholder engagement, and risk management as some of the mechanisms by which it sees benefits that include savings of costs, increases in market valuation, and increased access to capital as some of the financial benefits. Issues such as conflicting ESG ratings as well as short-term expenses are also covered. The strong empirical supporting observations in the findings support the idea that ESG integration is a long-term value creation strategic imperative.
Risk Management, Sustainability, ESG, Shareholder Engagement, Financial Strategy, Financial Performance
Risk Management, Sustainability, ESG, Shareholder Engagement, Financial Strategy, Financial Performance
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